If you can believe it, June 30 marks the eighth month that American car buyers have gone without the $7,500 federal electric vehicle tax credit, which President Donald Trump rescinded late last year. At the time, California Governor Gavin Newsom said his state would step in if Trump removed federal tax credits and struck a new budget deal.SB-111Although SB-168 The EV credit outline) that Newsom reached with the state legislative branch does just that. The $135.5 million state money will partially provide a $3,500 upfront rebate to first-time EV buyers in the state, with the remaining half of the money coming from participating automakers who must match the state’s contribution. Not too shabby, village.
According to USA Today, “Rebates will also be available for used EVs, although the amount has not yet been publicly released.” It’s a cash-on-the-hood credit, meaning that unlike the old federal tax credit, new EV buyers and lessees won’t have to apply for the money later — it will be applied at the time of purchase. New EVs will get $3,500 under the hood, while incentives for used EVs are half that. There are also some requirements for first-time EV buyers, including that the MSRP of eligible new EVs cannot exceed $50,000, and used EVs cannot exceed $25,000. That is, unless the new EV is manufactured by a zero-emission vehicle company headquartered in California, in which case it will receive incentives regardless of price. Sorry, not sorry, Tesla.
California is the only state where more than 20% of vehicles registered last year were electric or hybrid
The risk for large-scale electrification is higher in California than in any other state, primarily because of the densely populated and often smoggy Los Angeles area. The LA Basin is notorious for its poor air quality, caused partly by the area’s geography and mainly by tailpipe emissions. 6.5 million Vehicles registered in LA County. California is the only state in the US where more than 20% of new vehicles registered in 2025 were EVs and hybrids, so the new proposed incentives should push it even higher.
Other requirements to qualify for the incentive include a maximum weight of 8,500 pounds, and the vehicle must be registered to a California resident. Regarding the California-based ZEV company clause, it is possible that this exemption could be ruled invalid if a non-California-based manufacturer wins a case in court, but for now, it is included in the new budget.
Given the extremely absurd weather around the world recently, it’s amazing that anyone can deny the effects of human-caused climate change, and yet so many people don’t care. Even if you don’t care about climate change, you probably care about how much extra money you’re wasting on every gallon of gasoline because of President Trump’s decision to start a war with Iran and plunge the planet into an energy crisis. Hopefully this incentive will encourage more people to buy or lease an EV.
